Jorge Hurtado reports in Gaceta de Banderas (May 2004) that the vehicles of the Spanish Army operating in Iraq from July 2003 to May 2004 used a flag-like logo, painted (or maybe it was a decal) on vehicles' sides, doors etc.. The logo consists of a Spanish flag with, instead of the coat of arms, the word "Spain" in black Arabic lettering. This logo has never, as far as I know, been used as an actual flag, either for hoisting or otherwise.
Santiago Dotor, 14 May 2004
Spain in Arabic is Isbaniya, which in Arabic letters would be: Alif (with hamza below) – Sim – Be – Alif – Nun – Ye – Alif, that is, اسبانيا:
The vertical stroke standing alone on the right is the alif, the omitted hamza (dot) below which makes it pronounced "i" (that hamza is typically omitted except in formal usage.)
The first three bumps reading right to left are the letter sim, or "s."
The next bump with the dot below it is the letter be, or "b."
The vertical stroke connected to the be is another alif, this time pronounced as a long "a."
The first bump in the next connected string, with the dot above it, is the letter nun. You can't see it, because it isn't normally written, but there's a short i sound with the nun, which makes this pronounced "ni."
The next bump to the left, with two dots below it, is the letter ye, pronounced "y."
The last vertical stroke on the left, connected to the ye, is another alif, or long "a."
Put it all together and it spells Isbaniya, which is about as close to "España" as you can get in Arabic.